IATA: Potential revenue loss by European carriers in 2020 up to $89 bn

CAIRO - 24 April 2020: The International Air Transport Association (IATA) released an analysis showing that the potential revenue loss by European carriers in 2020 has grown to $89 billion and passenger demand (measured in Revenue Passenger Kilometers) is projected to be 55% below 2019 levels.

This is an increase over the previous estimates (released 24 March) of $76 billion and 46% respectively, the IATA said in its recent analysis detailing the risk to jobs from the mounting financial crisis threatening European airlines amid the outbreak of the COVID-19 pandemic.

"Overall, we estimate that the present 90% collapse in air traffic puts around 6.7 million jobs at risk and could lead to a negative GDP impact of $452 billion across Europe. This equates to an additional 1.1 million jobs and $74 billion in GDP over the March estimates of 5.6 million jobs and $378 billion," according to the IATA's analysis.

The increasing risk to jobs and GDP is due to a greater impact than previously expected from the air travel restrictions introduced as a result of the COVID-19 pandemic. IATA’s new analysis is based on a scenario of severe travel restrictions lasting for three months, with a gradual lifting of restrictions in domestic markets, followed by regional and intercontinental travel.

The United Kingdom will see 140 million fewer passengers resulting in a $26.1bn revenue loss, risking almost 661,200 jobs and around $50.3bn in contribution to the UK economy.

Meanwhile, Spain will witness 114 million fewer passengers resulting in a $15.5bn revenue loss, risking 901,300 jobs and $59.4bn in contribution to Spain’s economy.

"It is essential that governments move quickly to minimize this economic damage. Among the first priorities should be direct financial support, loans and tax relief to airlines. Regulatory relief is also crucial, especially a temporary amendment to EU261 to give greater flexibility on the terms of repayments for cancelled flights."

"Our latest impact assessment shows that the number of jobs at risk has increased to 6.7 million across Europe. As airlines face an unprecedented liquidity crisis, we desperately need European government financial and regulatory support,“ said Rafael Schvartzman, IATA’s Regional Vice President for Europe.